Contradictory Figures: Lessons From Uber’s Rise

Mike Isaac’s book Super Pumped: The Battle For Uber is one of the best business books I’ve read in a long time.

Unfortunately, the lessons aren’t as clear cut as they are in most profiles about entrepreneurs and business success stories. Parts of the story are inspirational. Parts are sickening. Parts are confusing. And other parts are depressing.

The book was full of the good, the bad, and the ugly. Here are some lessons I took away from Uber’s rise to prominence:

Technology can supercharge businesses these days. Garrett Camp came up with the idea for Uber in 2008 because the transportation system in the Bay Area was so subpar. Travis Kalanick took that idea and ran with it, creating a business out of thin air that’s now worth more than $50 billion.

A little over 10 years after that idea was hatched, Uber is a company that operates worldwide, using a process that has disrupted the transportation business in an obscenely short amount of time. Uber helps keep many drunk drivers off the roads, delivers food to your front door, and will likely solve numerous logistics problems for all sorts of businesses going forward.

I’m amazed at how quickly they were able to get this thing up and running.

There is so much venture money sloshing around in these companies. Isaac detailed an Uber company-wide party in Las Vegas to celebrate hitting the $1 billion mark in gross bookings. Thousands of employees were flown to Vegas for an entire week of celebration, drinking, and debauchery.

There were open bars everywhere, parties at clubs, and a grand finale performance by Beyonce (with Jay-Z sitting in the crowd).1

Uber was growing so fast no one seemed to care about such reckless spending, but the entire week cost more than $25 million, more than twice the amount they were seeded with during their series A round of venture fundraising.

Boards in Silicon Valley seem like they’re mostly useless. Kalanick had a standing meeting with Apple’s Tim Cook and Eddie Cue because the App Store was so important to the Uber’s business model. Cue asked Kalanick why Uber took an investment from Google and placed their chief legal officer on the board, considering both Uber and Google are in the self-driving car space.

Kalanick told them bluntly:

“The board is irrelevant,” Kalanick said, waving them off of the idea. “I hand pick all of these guys. They do what I tell them, and the way I’ve structured things, I do what I want.” Cue was taken aback. Many founders at least performed a sense of humility in public—a strategic modesty that Kalanick clearly lacked.

An unchecked ego will eventually become problematic no matter the person or business model in question.

Growth has a cost. I’ve never worked at a start-up so I can’t imagine the combination of excitement, hard work, and stress involved. While the founders get all of the press, much of this stress falls to the employees as well.

Isaac detailed a burnout culture where employees were expected to be working at all hours of the day. Uber offered company-wide dinner for employees like many other tech companies but they didn’t serve it until 8:15 pm. So if you wanted the perk you had to work an extra 2-3 hours to get it.

Employees even had to see therapists to deal with the fast-paced environment:

Uber employees were always sprinting. They kept working even after they went home, terrified of both their competitors and their bosses. The pace was causing burnout at all levels of the company; some engineers and designers were seeing therapists to deal with the strain.

The payoff from this hard work meant creating a new and exciting company. But the toll was exacted on people’s personal lives.

Most (all?) market-leading companies cut corners to get to the top. Uber essentially created a business that didn’t exist so they often operated in a grey area when it came to laws, rules, and regulations. They pushed these grey areas to the extreme, going so far as spying on government officials, tracking their digital lives and even following them to their houses to keep tabs on them.

The most egregious example Isaac used was a line of code called Greyball, which allowed the company to identify people who posed a threat to the company from a regulation perspective when they downloaded the Uber app.

Kalanick and the leadership team also took secret meetings with regulators in certain cities to encourage them to go after the competition such as Lyft.

I can appreciate hard work but immoral business practices set a bad precedent for your employees.

A toxic culture can only last so long. Kalanick was finally pushed out in 2017 after his venture capital investors could see the writing on the wall from all the stories about workplace sexual harassment, inappropriate conduct by employees, poor treatment of Uber drivers, subterfuge and government meddling.

He became a huge liability to the company and its organizational culture. At some point even huge growth numbers can’t offset a toxic tech bro culture.

Founder worship has gone too far. Its nice people like Steve Jobs, Elon Musk, Mark Zuckerberg and Travis Kalanick have created technologies and products that have changed the way we communicate, interact with one another, and get from point a to point b.

But these are not the people you should be looking up to. They all created tons of shareholder value but they were also egomaniacal jerks who often treated people like crap to get what they wanted.

I enjoyed this book but it left me with a sour taste in my mouth. Sure, Kalanick was stripped of his CEO title and forced to resign from the company he helped build. But he also walked away with billions of dollars in stock and seemingly learned nothing each time a transgression forced him to apologize for his actions.

In his biography of John D. Rockefeller, Ron Chernow wrote, “What makes him so problematic—and why he continues to inspire such ambivalent reactions—is that his good side was every bit as good as his bad side was bad. Seldom has history produced such a contradictory figure.”

Rockefeller was a ruthless businessman who was self-righteous and lusted for world domination when it came to building Standard Oil in the 19th century. But in his personal and family life the man was deeply religious and charitable, becoming one of the most philanthropic businessmen in history.

It seems many of today’s business leaders are also contradictory but many don’t even pretend to be good people outside the business. I understand why people respect the businesses and products these tech messiahs create. I don’t understand those who look up to them as business leaders.

Uber created a wonderful business but if there’s only going to be one winner in the space, I’ll be rooting for Lyft.

Further Reading:
Super Pumped: The Battle For Uber

1Beyonce was paid $6 million in restricted stock units for her troubles. Not a bad night’s work.

 
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